Tax Arbitrage Play Bitcoin

Take advantage regardless of the decision on capital gains taxes


Tax Arbitrage: Tax arbitrage is the practice of profiting from differences that arise from the ways transactions are treated for tax purposes. The complexity of tax codes often allows for many incentives which drive individuals to restructure their transactions in the most advantageous way in order to pay the least amount of tax.

Well it might not by an arbitrage by the precise definition, the following play comes very close and puts you in an advantageous situation regardless of the decision on the capital gains on Bitcoin and cryptocurrencies.



Yesterday Ron Paul called for a capital gains exemption for both cryptocurrencies as well as for precious metals, in an article titled 'Trump Is Right, the Fed Is Crazy'.

"The first steps are passing the Audit the Fed bill, allowing people to use alternative currencies, and exempting all transactions in precious metals and cryptocurrencies from capital gains taxes and other taxes."

He continued:


It is likely that the next Fed-created recession will come sooner rather than later. This could be the major catastrophe that leads to the end of fiat currency. The only way to avoid crisis is to force Congress to end our monetary madness. The first steps are passing the Audit the Fed bill, allowing people to use alternative currencies, and exempting all transactions in precious metals and cryptocurrencies from capital gains taxes and other taxes.


If congress would listen to Ron Paul, this would mean that an IRA does not impose a direct advantage over buying your own Bitcoins, or at least not when it comes to taxes. But, it is not very likely that the capital gains will be forfeited. Hence, we end up with a very smart play.
Putting your money in a Bitcoin IRA is a smart move regardless of the decision over capital gains taxes: if it does not get terminated, you avoid capital gains taxes and your profits could thus be 20% higher per year than in a normal account. Compounding interest means you would miss out on more than 500%. Now if it DOES get canceled, there will be an increased buying pressure and the Bitcoin price will very likely shoot up, just on that news.


Start owning Bitcoin for your retirement

To get your hands on BTC, while avoiding hefty capital gains taxes, there is a simple solution. It is called a cryptocurrency IRA, or sometimes called a Bitcoin IRA .





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